Site Mobile Navigation

Climbing Down the Ladder

I asked Kim Richardson, who is 59 and lives in a modest ranch house in Rocky Mount, N.C., what she would do if a hearing next month goes against her and she loses her home to foreclosure.

After a long pause, she said, in a voice faint from worry, “I don’t know. I’ll be out on the street, I guess. I don’t have anywhere to go.”

Ms. Richardson, who lives on a pair of monthly disability checks, lies awake night after night, unable to fend off the frightening homeless scenarios that dominate her thoughts. “I never believed that anything like this could ever, ever happen to me,” she said.

If you believe Ms. Richardson’s account, and I do, she was fast-talked into a mortgage that would have been impossible to pay off with her fixed income. Foreclosure would have seemed inevitable. But Ms. Richardson and her current lawyer, Carlene McNulty of Raleigh, N.C., said the figures that would have made it obvious to Ms. Richardson that she couldn’t afford the mortgage were deliberately concealed.

While the news media have been focusing on the banks, brokerage houses and mega-millionaires being buffeted by the ill winds of the financial crisis, the millions of lower- and middle-income Americans sinking toward the protracted hell of destitution are getting very little attention.

Older Americans are taking a particularly wicked hit. Analysts at AARP have found that “Americans age 50 and over represent about 28 percent of all delinquencies and foreclosures in the current crisis.”

Losing a home to foreclosure is a disaster for anyone. It’s a catastrophe for older people. The AARP Public Policy Institute, in a recent report, poignantly explained: “For Americans age 50 and over, losing a house represents a loss from which there is limited time to recover, and for some, a recovery may be impossible given their age and limited incomes.”

Photo

Bob Herbert

When Ms. Richardson bought her house in December 2005, she tried to make it clear that she could not afford monthly payments much higher than $500. Fine, she was told. She closed the deal with the understanding that she had a fixed-rate mortgage with monthly payments of $537. Prudent and skeptical, she tried to find out if there were any economic bombs hidden in the confusing mass of paperwork that she was confronted with.

“I had all these stacks of papers at the closing,” she told me, “and they were just passing papers back and forth to me, back and forth, telling me to sign. And I kept saying, ‘Wait a minute. Wait a minute.’ ”

She was assured that nothing untoward was going on.

Ms. Richardson did not have a fixed-rate mortgage. Her monthly payment rose, and rose again, eventually passing $800, which she could not pay. There was also a balloon payment provision hidden in the welter of documents, along with other obligations that would not emerge until Ms. Richardson was waist-high in economic quicksand.

Ms. McNulty, the lawyer, is trying to forestall the foreclosure, while at the same time trying to locate those who, in her view, defrauded her client. Her attempt to hold anyone accountable has been maddeningly difficult. As she explained, the original deal “was securitized into one of these now infamous trusts.”

The distress calls from despondent men and women who believed until very recently that they were living the American dream are coming from all over the country. Tova Navarra of Atlantic Highlands, N.J., was waylaid by illness. “I will end up bankrupt, disabled and bereft of a career,” she told me. “I’m wondering if this will become a bankrupt society.”

After a series of medical setbacks forced her to stop working, Ms. Navarra, 60, watched her standard of living deteriorate step by agonizing step to the point where she was forced to leave her condominium and move into a senior citizens’ residence that she currently cannot afford. The condo is in foreclosure, and she is staring at a future with no upside.

“The first time you realize that you can’t pay the mortgage — that’s the beginning of a very keen panic,” said Ms. Navarra. “The medical bills pile up and that’s when people start deliberately skipping doses to try to make the medicine stretch out a little more.

“You find yourself gradually climbing down the economic ladder, and you start thinking, ‘How am I going to survive, and where am I going to go?’ I said to myself, ‘Oh, my God. I’m going to end up sleeping in my car.’ ”

Real people. Real suffering. We may be fascinated by Wall Street, and bogus yarns like Joe the Plumber’s. But the real story in this country right now is the increasingly dire plight of those heading toward the bottom of that ladder that Ms. Navarra was talking about.

A version of this op-ed appears in print on , on page A23 of the New York edition with the headline: Climbing Down The Ladder. Today's Paper|Subscribe